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Last Updated: Jul 2nd, 2008 - 21:15:22 |
(ARA) - After the initial euphoria of college acceptance passes, reality sets in: someone has to pay for it. When financial aid is not enough to cover the cost of college and the start date of school is nearing, more families are turning to alternative financing options.
Families should first consider funding options that do not need to be repaid, such as scholarships and grants. Once those have been exhausted, they may consider an education loan to cover their education expenses. The Federal Stafford Loan is the most common type of education loan for undergraduate and graduate borrowers. However, students are limited by what they can borrow.
One option to help bridge the financial aid gap is a Federal PLUS Loan. PLUS Loans are the lowest-cost way for parents to finance their child's education. Parents may use PLUS Loans to borrow money as needed, including to get money for tuition, room and board, books, supplies, even travel to cover the cost of attendance at their child's college of choice.
“Parents can borrow for college, but they cannot borrow to pay for their retirement,” says Martha Holler, spokesperson for Sallie Mae, the nation’s number one paying-for-college company. “Most families will qualify for PLUS Loans, and everyone gets the same low interest rate regardless of their credit history.”
PLUS Loans are not based on income or assets and do not require collateral. Moreover, parents can take up to 10 years to repay the loan using a wide variety of repayment options, including delaying repayment for up to five years while their child is in school or once their child leaves school. Sallie Mae offers free, no obligation credit decisions regarding PLUS loans when parents visit www.parentanswer.com or call (800) 891-1410.
Another last-minute financing option for students is a private education loan, such as a Sallie Mae Signature Student Loan. The Signature Student Loan is a private education loan for undergraduate, graduate and health profession students attending four-or-five-year schools at least half time. Interest rates and fees are based on credit history; the better the student's or co-signer's credit, the lower the interest rates and fees. Students and families can learn more about the Signature Student Loan and use Sallie Mae's online pre-approval feature to receive credit results by logging onto www.SallieMae.com/Signature.
Another option is to take advantage of the school’s monthly tuition payment plan. Most schools offer families the ability to make monthly tuition payments over the course of the school year, an interest-free alternative to a large, one-time payment due at bill time. For a small fee, families can reduce the amount they need to borrow to cover the cost of college. Students and their families should ask their campus bursar or financial aid office for more information.
“Finding last-minute money to pay for college is doable, and parents don’t have to take a second job or another mortgage on their home to accomplish it,” says Holler.
For more information on last-minute college financing options, visit www.CollegeAnswer.com, where students and families will find a number of resources on planning and paying for higher education. Courtesy of ARA Content
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